In-App Purchases Account for Growing Chunk of App Store Revenues

Distimo-Revenue-Breakdown-Apple-App-Store-in-Feb2013In-app purchases accounted for a new high of 76% of revenue in the Apple App Store for iPhone in February 2013, up from 53% in January of last year, according to [download page] a new report from Distimo. Breaking that down further, the study shows that 71% of revenue came from in-app purchases from free apps, while in-app purchases from paid apps generated another 5% share.

Examining the top 250 grossing iPhone applications in February 2013 released since January 2012, the study reveals that average revenue per download is actually higher for the small amount of paid applications ($2.25) than for the free apps ($0.93). So it appears that the large share of revenues generated by in-app purchases from free apps owes itself more to quantity than monetization. In fact, of the 250 top grossing applications, just 27 were paid only. (That in itself is an indication of the power of the freemium model, though: the vast majority of top grossing apps are freemium rather than paid apps.)

Other Findings:

  • The average revenue per download across the top 250 grossing apps was $0.99.
  • Paid apps with in-app purchases (among the top 250) had a higher average revenue per download than paid apps without in-app purchases.
  • Broadening the analysis to include the top 250 grossing applications in 3 other markets, the study shows that average revenue per download is far higher in Japan than in Germany, the UK, and the US.

About the Data: All numbers in the report are based on Distimo AppIQ data, which allows users to view estimated revenues and downloads for every app in the Apple App Store and Google Play. The data excludes advertising revenue.